Empirical Analysis On Operational Risk Of The City Commercial Bank’s Cross-Regional Development

In recent years, lots of city commercial banks still pursue to develop cross-regional business. during these times, it appeared a variety of risk events, which lead academic circles to discuss whether the city commercial bank go across regions or not. The content of the research involves many aspects, these research conclusions for the further development of city commercial banks cross-regional operation provides opinions from multiple perspectives. But after view the research literature in recent years, we can find there is a few research contents of cross-regional business operation risk in city commercial bank, and businesses across the region also produced many operation risk events, which cause a certain damage to the city commercial banks. Therefore, this paper hopes to study whether and how the cross-regional operation of city commercial banks can influence operational risk, through which provides some reference opinions about whether for city commercial banks should be operate across regions.The paper analyzes present situation of cross-regional business and characteristics of operational risk in city commercial banks, reading a large amount of relevant literature and comparing the different approaches to measure operational risk. Finally we choose the revenue model to do measurement of the current operational risk situation in our country’s city commercial banks. We selects five typical city commercial banks such as Bank of Beijing, Bank of Shanghai, Bank of Nanjing, Bank of Ningbo and Bank of Dalian as sample, using the data between 2004 and 2013 in this five banks as the analysis object to do the research. We set net income as the dependent variable, and real GDP growth rate, non-performing loan ratio, the deposit-loan ratio etc as the independent variable. After the panel data regression analysis, we estimated the value of the city commercial bank in operation risk before and after the cross-regional management. We also calculate the absolute value and relative value in three city commercial banks before and after the cross-regional business. We summarized the data analysis, and draw a conclusion that the cross-regional business may increase the possibility of operational risk and propose d specifically for city commercial bank in the future development and strengthen the operational risk management.